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Issues that Influence Business Intelligence Solutions for SAP

By Philip Russom, Senior Manager, TDWI Research

The issues discussed here quantify the state of BI solutions for SAP; they also describe the issues you need to consider before deciding which mix of tools, platforms, approaches, professional services, and business sponsorship are appropriate to your solution.

Applications and Data Warehouse Architecture Issues

Most of the data that populates data warehouses and reports comes from various types of operational applications, including those for ERP, CRM, and SCM. Because these are prominent sources of data that BI is based on, the number and diversity of applications strongly influences the data content and architecture of any BI solution, especially those that involve SAP.

  • SAP users don’t only use SAP applications. TDWI’s survey asked, “From which vendors has your organization acquired packaged applications for ERP and other operations?” The survey population is dominated by SAP users, so it’s not surprising that 71% of respondents report using SAP applications. (See Figure 1.) But many reported also acquiring applications from Oracle (25%), Peoplesoft (24%), Siebel (15%), JD Edwards (12%), and so on. Given the numerous vendors selected by survey respondents—plus home-grown solutions—it’s safe to say that most SAP-centric businesses also have significant non-SAP applications.

  • From which vendors has your organization acquired packaged applications for ERP and other operations? (Select all that apply.)

    Figure 1. Based on 476 responses from 278 respondents. Average responses per respondent: 1.7

  • The SAP-centricity of your BI solution is a matter of degree. In other words, a BI solution for SAP may incorporate SAP applications data only, or it may also integrate data from other applications (and even nonapplication sources like syndicated data). The latter is necessary for a complete view of organizational performance. In fact, gaining a centralized “single version of the truth” is one of the reasons organizations deploy enterprise data warehouses. The challenge is to satisfy both application-specific and enterprise-scope BI requirements.
  • Application diversity may lead to BI solution diversity. This may mean deploying both NetWeaver BI and an enterprise data warehouse (EDW). In most cases, NetWeaver BI supports data marts and reports specific to businesses and processes supported by SAP applications, whereas the EDW collates information from many sources for strategic decision making. To reduce the number of solutions, some SAP-centric organizations have made NetWeaver BI the equivalent of an EDW, while others rely on an EDW without any SAP BI products. Selecting one of these data warehouse architectures—or a combination of them—is a tough decision for SAP users, because it affects the cost of BI, completeness of data content, data ownership, and how BI goals are prioritized (i.e., tactical operations versus strategic planning).
Organizational Issues

TDWI asked of SAP users: “Is the BI environment for SAP the same as your enterprise BI environment?” (See Figure 2.)

Is the BI environment for SAP the same as your enterpriseBI environment?

Figure 2. Based on 172 respondents who are SAP users.

  • Enterprise-scope BI. Over half (56%) said “yes,” which suggests that these respondents’ BI infrastructure is enterprise in scope—that is, it spans the data and BI needs of many applications and business units, not just those associated with SAP applications.
  • Application-scope BI. Roughly one-third (37%) said “no,” suggesting these users have a BI solution that is narrowly focused on the data and business processes of SAP applications. Of course, this does not preclude them from also having a separate BI solution of enterprise scope.
  • Determining scope is an important BI design decision. A BI solution for SAP may be enterprise scope, with SAPspecific requirements satisfied by a subset of the solution. Or it may be application scope, possibly complemented by an enterprise-scope BI solution. The scope of a BI solution for SAP is related to its ownership and sponsorship. (See Figure 3.)
  • Line-of-business managers (44%) commonly sponsor BI solutions for SAP. Line-of-business managers often fund, own, and sponsor operational applications, so it’s possible that they have extended this role to also sponsor application-specific BI. Even so, IT and BI directors sponsor BI solutions for SAP just as often (45%).
  • SAP BI sponsorship can also be shared. Several survey respondents selected “Other” and entered comments like “we use a team approach, no single sponsor.” Sponsorship is “shared by all businesses” where it involves “several stakeholders.” Or BI may be sponsored by “corporate leadership as part of the SAP implementation.”
  • Finance departments often sponsor BI, whether for SAP or not. We’re reminded of this by survey respondents who listed their finance organization or its CFO, VPs, and directors.

Who’s the primary sponsor for your BI solution for SAP?

Figure 3. Based on 172 respondents who are SAP users.

Build versus Buy Issues

When it comes to ERP applications and the classic buildversus- buy decision, buying is the norm by a long shot, with most survey respondents buying and customizing (57%), followed by those who buy but don’t customize much (27%). (See Figure 4.) By comparison, building an ERP system is rare (9%). This is natural, given the complexity of ERP processes and how difficult it would be to build and maintain an application to automate them. Plus, multiple software vendors offer mature ERP systems that are feature-rich, robust, and have solid track records.

What strategy has your organizati on followed in acquiring ERP applications?

Figure 4. Based on 278 respondents who use applications from SAP and other vendors.

To quantify the build-versus-buy approaches of BI solutions for SAP, TDWI’s survey first identified respondents who are SAP users, then asked them: “Which best describes how you built your BI solution for SAP?” (See Figure 5.) A whopping 75% reported acquiring BI products from SAP, which is a high penetration of BI products for an applications vendor.

Which best describes how you built your BI solution for SAP?

Figure 5. Based on 172 respondents who are SAP users.

Note that the level of customization varies with SAP BI products. Relatively few use SAP BI products “as is” (10%), while most assign in-house personnel (35%) or hire consultants (30%) to customize them. Customization has ramifications for packaged solutions:

  • BI solutions are hard to package. That’s because an organization’s BI data sources, its data models, and its report presentations all vary tremendously. However, if you narrow the scope of the BI solution to specific use cases, which SAP NetWeaver BI does by focusing on standard business processes, the breadth of user requirements is reduced, thereby reducing the difficulties of packaging a solution that works for multiple user organizations. But BI requirements still vary somewhat, even when focused on ERP, so organizations inevitably customize to some degree.
  • The greater the customization, the greater the difficulty of upgrading. Some SAP customers would like to upgrade from older BW releases to recent NetWeaver BI ones, but they feel that customization makes the upgrade too difficult to attempt. Let’s all recognize that customization is inevitable with BI products, so upgrades usually involve development work.
  • Avoiding customization reduces project time and cost. A tried-and-true strategy for a packaged solution is to roll out the first phase with little or no customization, then tailor the solution to organizational requirements in subsequent phases.

“We started our implementation of SAP BW in 2002, working in parallel with the firm’s implementation of the SAP ERP,” said Brian Hickie, former VP of Business Intelligence at McKesson Pharmaceutical. “We only had nine months to implement the data warehouse, along with considerable ETL jobs and a number of initial analytics and reports. We made the deadline despite the fact that the SAP ERP configuration precluded the use of standard business content or standard data extractors; the ETL jobs and BW required a considerable amount of configuration to provide the data to generate analytics and reports from the ERP and legacy systems.”

Developing home-grown BI solutions isn’t as common as other approaches in Figure 6 (16%). However, other survey questions showed higher rates, and survey respondents who selected “Other” entered responses that involve home-grown solutions:

  • SAP BW and EDWs can coexist peacefully. Some BI solutions for SAP involve both NetWeaver BI (specifically the BW component) and an independent enterprise data warehouse (EDW). For example, one survey respondent said: “We both use BW and extract SAP data into a data warehouse.” Another reported using “BW and an in-house solution based on Oracle and Business Objects,” while yet another said, “[We] use SAP BI as an OLAP tool to access a Teradata EDW.”
  • Some BI solutions for SAP are a work in progress. As one survey respondent put it, “We’re in transition from a legacy custom-developed EDW to SAP BI.”
Issues in Software Acquisition Strategies

TDWI asked of SAP users taking this report’s survey: “What was the primary reason for your organization’s implementation of a BI solution for SAP?” In the survey, the question had no pre-written answers to select; instead, each respondent typed an answer in his/her own words. Many respondents turned the question into a soapbox, because they have strong feelings either for or against SAP as a preferred software supplier and how that predetermines the products they use.

  • For many organizations, naming SAP a priority supplier leads inevitably to SAP BI products. Some respondents stated this in matter-of-fact answers such as: “SAP is our preferred provider in all areas.” Others made a direct causal link: “Using SAP ERP was the main driver to start with an SAP BW solution” and “SAP is selected as our common platform, which includes BW.”
  • Some spoke of the positive leverage between NetWeaver BI and SAP ERP. “BW is a good fit on top of SAP ERP and SAP CRM,” enabling users “to leverage prebuilt content and integration with the ERP.” According to other survey respondents: “Most of our [BI] information is sourced from SAP components,” and “BW provides a direct link to primary source data.”
  • A few people complained about the SAP-centric strategy. One claimed that using SAP BI products is due to a “strategic decision to use SAP overall, even when it does not fit.” Others received SAP BI products due to management actions beyond their control: “It [NetWeaver BI] was paid for in an overall package of software” and “parent company purchased SAP solutions.” Selecting a preferred supplier is a good procurement practice, in general, but it’s frustrating for IT professionals when the strategy doesn’t consider user requirements.
  • Most mentioned the usual benefits of BI as reasons for implementing a BI solution. Several listed common BI goals like better decision making or improved corporate performance. Others cited specific BI needs such as financial reporting, datasets for business analysts, or operational reporting based on SAP ERP source data.

“All of my clients have multiple application modules from SAP, and for most of them, that’s a good enough reason to get their BI technology from SAP,” said a consultant who specializes in BI solutions for SAP. “Why bother with an independent data warehouse? BW infrastructure—especially with recent NetWeaver releases—is almost identical to what you’d build into an independent warehouse. So the common practice I see is to leverage what you already have, instead of reinventing the BI wheel. Also, my clients trust SAP as a large, stable, non-acquirable vendor. In terms of best of breed, other BI and data integration tools are better, but SAP’s offering is relatively complete and pretty good. And the direct integration between BI and ERP is hard to beat.”

“We have a mature, best-of-breed technology stack for data warehousing and business intelligence, but it’s currently at risk because our company’s being acquired by a company with a deep commitment to SAP applications and BI,” said an enterprise data architect. “We’re under pressure to abandon our EDW and go with SAP NetWeaver BI, but we’re not sure it will meet our requirements for strategic and financial reporting, much less scale up. The merger is barely under way, and we’ve just started investigating NetWeaver, so it’ll be a long time before we know which way to go.”

Philip Russom is the senior manager of TDWI Research and oversees many of TDWI’s research-oriented publications, services, and events. He can be reached at [email protected]. This article was excerpted from the full, 32-page report by the same name. You can download this and other TDWI Research free of charge at The report was sponsored by Business Objects, Cognos, HP, IBM, Microsoft, MicroStrategy, SAP, and Teradata Corporation.

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